Amazon may be planning to broaden its Android-based device lineup with a new smartphone, according to a report from Bloomberg.

Citing unnamed sources, the news agency reported today that the online retail powerhouse is working with Chinese manufacturer Foxconn on the device. The Taiwan-based electronics maker is best known for its production of Apple's flagship iPhone and iPad, though it builds devices for a host of other technology heavyweights as well. (Amazon's existing Kindle Fire tablet is made by another Chinese company, Quanta Computer.)

Few details are available on the rumored smartphone, though experts have already speculated that it will follow the lead of the Kindle Fire in using an extensively revamped version of Android. Bloomberg noted that Amazon also hired a new patent czar recently, presumably as a hedge against the intellectual property-based legal trouble that has dogged smartphone makers like Samsung.

The timing of this news highlights potential difficulties for Amazon's possible entry into the smartphone market. While the Kindle Fire was widely praised as a cost-effective portable media center, Google's recently released Nexus 7 tablet is already being hailed as a dangerous competitor, and Apple may yet roll out a scaled-down iPad, further constricting Amazon's share of the low-end tablet market.

In smartphones, the picture is still less rosy. With the competition far more established than in the still-fluid (though generally Apple-dominated) tablet sector, it could be difficult for an Amazon smartphone to get traction.

Nevertheless, Amazon's unique strengths -- particularly its expertise with online media -- could prove to be important advantages which might allow it to compete in the fast-paced, cutthroat smartphone marketplace.